The term credit can mean many things. For most people, it is the ability to borrow today and pay later. The idea of “credit-worthiness” defines our personal finances, and reaches out to all parts of our financial lives. Credit can be an accounting term. You can talk about credit cards, your credit history, your credit score, or the three credits you got in college for taking Bowling. This page is the credit nerve center of ThinkGlink.com. From this page you can learn more about what credit means and how having good, bad, or mediocre credit affects your personal finances.
Identity Theft Warning Signs
If you're worried about identity theft, there are ways you can protect yourself. And if you know the signs, you can stop identity theft sooner. One of the best ways to protect your identity is to order your credit report annually from annualcreditreport.com.
Opt Out to Protect Yourself
One way to reduce your risk of identity theft is to pay close attention to privacy policies. Some "opt out" policies offer consumers ways to remove or withhold personal information from databases. Opting out improves the chances that your identity will not be stolen.
Identity Theft
Identity Theft is becoming a bigger problem, in part because people are using more and more technology. Consumers must become more vigilant about where and how they store personal information to avert identity theft.
Racking Up Debt Before Closing
Credit card debt can hurt your chances of closing on a home even if you have already been approved for a mortgage. What many borrowers don't realize is that the lender may take another financial snapshot of their lives just before the closing. The second pull of your credit history and credit score could come any time within a week or two of your scheduled closing date. Keep your debt-to-income level the same as it was at the time the loan was approved.
Lenders Wary Of Low Credit Score
A low credit score can make borrowing money for a home loan difficult. One solution for borrowers with bad credit could be FHA loans and credit unions. But if you have a low credit score, you should be doing everything you can to improve it.
Federal Tax Lien Lowers Credit Score
When a federal tax lien gets filed against you, your credit score will fall. What can you do to rebuild your credit score after you've paid off the tax lien? Paying your bills on time, not carrying a credit card balance and not closing old lines of credit all help boost your credit score.
ARM Mortgage Rates Increase
What can you do when the introductory rate on your adjustable rate mortgage (ARM) is expiring? You need to understand what index your ARM mortgage is tied to and how the rate will change after the introductory period. You can then decide whether to refinance your ARM mortgage with a different interest rate.
Using Home’s Equity To Pay Off Credit Card Debt
A homeowner has already used her home's equity to pay off credit card debt. Now the credit card debt is run up again but she needs a home equity loan to pay for home repairs. Credit counseling might be in order to get the credit card debt under control before this homeowner thinks about home improvements.
Negotiating Repayment Of Credit Card Debt
Negotiating repayment of credit card debt can impact your credit score and your tax bill. One problem with offering credit card companies less than what you owe them is that you may have a hefty tax bill because the IRS views the settlement as "phantom income." If you negotiate and settle with your creditors, be prepared to pay the tax bill the following year. You should also - as part of your final agreement - get the credit card company to report your balance as "paid as agreed" or "paid in full."
Use Cash Savings To Pay Off Credit Card Debt
If you've found yourself in a situation with a large amount of credit card debt and cash on hand, take the cash to pay off the credit card debt. While it might be nice to think you have a cushion of cash for an emergency, there's no point in paying high credit card interest rates when you have the cash to pay it off. If you simply pay off the debt, and then start to "repay" yourself with the savings, you'll quickly replenish your cash savings.